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Indebtedness among Farmers in Punjab
While debt among farmers is no longer considered undesirable, ever-mounting debt and reduced repayment capacity surely are. The existing literature has found a deep connection between indebtedness and suicides among farmers and perceived it as a reflection of growing agrarian distress. Based on the findings of a primary survey conducted in Punjab, we try to assess the debt position of Punjab’s farmers, and present the magnitude and burden of debt, highlighting the farmers’ debt repaying capacity. The source and purpose of credit are discussed in detail and the factors affecting indebtedness have also been explored.
This research paper is based on the findings of a primary survey conducted for the year 2016–17, under a major research project (2017–19) titled “Access of Institutional Credit to Small and Marginal Farmers and Its Impact on Their Livelihood—A Case Study of Punjab” funded by the Indian Council of Social Science Research, New Delhi.
Indebtedness among Farmers in Punjab
The availability of timely and adequate amount of credit at affordable rates of interest is a prerequisite for improving rural livelihoods and accelerating rural development in agrarian economies like India. Around 85% of the operational landholdings in India belong to small and marginal farmers, who are engaged in cultivating around 44.6% of the total operated area (Ministry of Agriculture 2014). Due to the presence of this huge section of poor and resource-deficient farmers, the credit requirement is enormous and highly unavoidable, which, in the presence of low repayment capacity, leads to indebtedness.
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